Illustration: Tiffany Herring/Axios
Fintech investors across venture, growth and private equity say 2025 finally felt busy again.
- Most of the activity happened in software automating finance workflows, infrastructure for private markets and tools that move more wealth into alternative assets.
Why it matters: Those infrastructure deals are likely to set the tone for 2026, as investors try to turn higher deployment into real liquidity for LPs through IPOs, secondaries and strategic sales.
Reality check: 2025 was busier, but not a full reset. This year marked a clear improvement from 2024, yet investors say the market is still working through 2020-21 valuations.
Zoom in: At the early stage, investors say activity stayed strong. Defy partner Medha Agarwal says, "This has been the busiest year. It has felt nonstop."
- Much of that activity, she adds, is in "adjacent fintech," with "a lot of AI products that are trying to automate finance workflows."
Growth investors describe a pickup from 2024, though it might not have met expectations for a massive tidal wave of deals.
- "We've been on an upward trend for the last three years, but I still think dealmaking activity is a little more muted than people predicted at the front end of the year," FTV Capital partner Kyle Griswold says.
Private equity firms also report more deal flow, but with a long line of companies stuck at old marks.
- "Valuations have normalized. Capital is flowing again, but buyers remain disciplined. The overall tone is selective but constructive," Charlesbank managing director David Katz says.
- GTCR co-CEO Collin Roche says his team has been very active over the last year, but sponsors that paid peak prices remain cautious. "Are deals happening? Absolutely. Is the pace adequate to remove this backlog? No," he says.
Exits still jammed
Liquidity still lags deployment. Investors say cash is coming back, but not enough to clear the backlog.
- GTCR's Roche says some firms have been active on the liquidity front, but that private equity as an asset class is still behind. "Overall liquidity is not adequate to really return enough capital for LPs, and then to have healthy allocations," he says.
- "The secondary market has absolutely taken off," Roche says, as institutions sell fund interests instead of waiting for full realizations.
Between the lines: Structured vehicles are helping to fill some of the gap.
- Single-asset continuation funds are "becoming more and more common as exit paths in the private equity landscape," says Houlihan Lokey's global head of fintech, Alec Ellison, because they give some LPs liquidity while letting others roll into a new vehicle tied to a high-quality asset.
At the company level, secondaries and tenders are becoming routine rather than one-off events.
- NewView Capital partner Ankit Sud says "those tenders are going to be more regular occurrences," with some late-stage businesses using them "every year, or every other year" to keep employees and early investors liquid.
- He adds that even companies that are "not IPO-able in the next 12 to 24 months" are running tenders as "more like a regular employee benefit."
State of play: The IPO window is open, and some investors see that window widening.
- "We're incrementally getting back to normal [IPO] volumes, but we're not there yet. That will continue through 2026," Wellington's Matt Witheiler says. "We anticipate the equities backdrop should be good for most of the year."
- Sapphire Ventures partner Rajeev Dham expects fintechs to account for a large share of new issuers. "I would venture that in the next 12 to 24 months, there may be more fintech and fintech-adjacent IPOs than there are pure-play enterprise IPOs."
